Agricultural lender, Apollo Agriculture, has raised KSh 276 million (US$2.5 million) through a structured finance transaction that converts thousands of smallholder farm loans into securities sold to institutional investors, marking Kenya’s first private-sector local currency securitisation in the smallholder agriculture sector.
- •The deal allows Apollo Agriculture to sell future repayment streams from its existing loan book to investors in exchange for immediate cash, freeing up capital for additional lending, without increasing leverage on its balance sheet.
- •The transaction is backed by a pool of 23,839 smallholder farmers, mostly women, with an average loan size in the portfolio is KSh 17,942.
- •The transaction is the first tranche of a broader programme targeting KSh 2.37 billion in total issuance, and more than 130,000 farmers over time.
“This is a meaningful step in building efficient, scalable funding for smallholder agriculture. By converting receivables into working capital, we are able to lower our cost of funds and expand access to affordable, local currency financing for farmers,” said Eli Pollak, CEO of Apollo Agriculture.
By selling the loan receivables, Apollo Agriculture immediately recovers capital that would otherwise be repaid over time, lowering its cost of funds and allowing it to issue new loans more rapidly. The structure also reduces reliance on equity or debt financing at the corporate level.
The agri-finance company provides credit alongside farm inputs, insurance, and agronomic support, using machine learning models and satellite data to assess borrower risk in a segment typically considered too fragmented and data-poor for institutional finance.
Institutional funding for the first close came primarily from the IDH Farmfit Fund, which acted as anchor investor, alongside other participating investors. The fund is managed by IDH Investment Management, a development-focused investment platform.
“This transaction showcases how well-functioning market infrastructure can catalyse institutional capital for sectors traditionally considered high-risk, like smallholder agriculture. We see this as a blueprint for how structured finance can unlock sustainable, large-scale funding for inclusive growth across Africa,” said Dr. Evans Osano, Chief Financial Markets Officer at FSD Africa, which supported the transaction through legal structuring, regulatory engagement, and investor mobilisation efforts.
The securitisation was structured and enabled through Kaleidofin, a fintech infrastructure provider that designs and manages debt capital market instruments in emerging markets. Its platform aggregates granular loan data and assigns risk profiles using an AI-driven scoring system that combines transaction histories, credit bureau data, and alternative datasets.
The deal reflects a growing shift in African agricultural finance toward capital markets-based funding structures, where fintech lenders originate and manage credit risk, while institutional investors provide liquidity through structured instruments backed by real-world cash flows.
